JPMorgan Chase has cut its 2026 year-end target for the S&P 500 from 7,500 to 7,200, citing concerns over oil supply through the Strait of Hormuz and geopolitical tensions. Strategist Fabio Bassi warns that higher energy prices and reduced corporate profits due to the conflict will slow global growth and increase inflation. He advises investors to remain in the market but with downside hedges. The current S&P 500 value is 6,591, offering nearly 10% upside from JPMorgan's revised target.
The oil price shock also adds pressure to corporate earnings, with around five to six vessels per day now passing through the strait, down over 95% from pre-conflict levels.